Would you like to cut your company’s travel-related and transport expenses? While the question might seem to refer to an insignificant line item on a much larger balance sheet, it’s not. For many small startups, new companies, and even medium-sized firms, business trip costs add up fast. They can threaten overall profitability unless they are effectively dealt with. What are some of the most efficient solutions?
For starters, managers and founders should set commonsense per diem rates for company-related excursions. Fortunately, there are ways to accurately estimate the proper amounts. Second, fleet supervisors who leverage the power of fuel cards can vastly reduce daily operations charges. Other kinds of organizations can improve their bottom lines by negotiating with hotel chains for discounts, pooling frequent flyer miles, scheduling more video connected meetings, opting for mid-week business trips, and choosing buses over air transportation whenever possible. The following examples can serve as a guide for anyone who wants to shrink transportation and travel-related costs for their company.
1. Set Sensible Per Diem Levels
What’s the right dollar amount for your organization’s per diem? There’s no fixed figure applicable in every industry. However, a few minutes of online research can pay big dividends. Check for national per diem averages in your industry based on the number of employees, region, and the specific business niche. Then, use that amount as an experimental guideline for a few months, increasing or decreasing it as circumstances dictate.
2. Use Fuel Cards for Vehicle Fleets
Transport firms spend the bulk of their money on daily operating expenses and salaries. While driver salaries are a relatively fixed figure, operations costs are not, and supervisors can do a lot to control them. Fuel cards serve as a highly efficient and effective way to keep close tabs on fuel consumption, create realistic spending limits, earn at-the-pump discounts, make IFTA paperwork easier, etc. Fleet managers should make it a priority to learn the ins and outs of using fuel cards. They stand to save significant amounts of money just by finding out how to select the card that is most suited for their company. Another way to minimize expenses is to combine the power of various fuel usage systems alongside the cards to save even more money in the long run.
3. Negotiate with Hotel Chains
There are business travel gadgets you can buy to make your trip easier, but negotiation can also help make your trip easier and more economical at that. National lodging chains are famous for making deals with commercial clients. To make this hack work, it’s best to work with one hotel chain for a few months before attempting to get an across-the-board discounted rate. Phone the headquarters office and speak with a commercial client rep. Be ready to state how much money your company spends on lodging per year. Explain that you want a discount so that your employees can continue using that hotel’s facilities.
In most cases, this tactic can net businesses about 10% off the already discounted commercial rate. Some chains will want documentation that your company has been staying at their hotels regularly for at least six months. Whatever the case, be willing to provide them with an honest estimate of how much you intend to spend on their facilities during an average year.
4. Minimize Travel, Do More Virtual Meetings
It might seem obvious, but large numbers of businesses are choosing to cut out the majority of their commercial travel and replace it with video and virtual meetings. The rise of video platforms during the recent COVID pandemic pushed this solution to its logical conclusion: unless there’s a real need for in-person meetings, video connections can nearly always serve the same purpose for a fraction of the cost. Be sure to install the latest conference apps on all the company computers.
5. Schedule Midweek Trips
In some situations, timing is everything. That can be true for corporate meetings in faraway destinations. Scheduling mid-week transportation and lodging can help keep costs as low as possible. One reason for the effectiveness of this hack is that airlines and hotels usually up their rates between Fridays and Sundays. That means a Tuesday through Thursday business meeting might be a much wiser choice for managers who are looking to conserve company cash. For travelers, mid-week excursions offer the added benefit of being less crowded. When working in the destination city, it’s easier to get around during the week than on weekends or Fridays.
6. Use Buses and Trains When Possible
Air transportation is the costliest way of getting from one place to another. Unfortunately, too many entrepreneurs and management teams forget to explore lower-cost alternatives like rail and bus lines. This is an especially viable option for firms that operate in large metro areas and medium-sized cities. While train tickets can vie with airfare in terms of price, buses usually cost just a fraction of airline rates. When time is not a pressing concern, these two slower, potentially cheaper ways of traveling can make great sense for organizations seeking to minimize their expenses.